The results of the French and Greek elections are being heralded as a rebuke to "Austerity" as a path away from the fiscal brink. As National Review online writer Veronique de Rugy says in - "Show me savage spending cuts europe please," Europe has not cut spending in general and the trend in spending is still higher, although the slope of spending growth has turned as bit shallower. As long as voters keep voting for less austerity expect the European debt crisis to move inward from the periphery and northward from the Mediterranean.
I view the European debt crisis as a preview of what the United States will face in the next 5-10 years if we do not get entitlement spending under control. I am dismissive of the ability of tax increases to close our fiscal gap as we are already so far down the road towards insolvency that tax increases are more likely to lead to the massive unemployment and negative tax growth that Greece and Spain are experiencing today. Just my opinion, but the Europeans have been running a grand experiment along the lines of higher government spending and higher taxes for the past 30 years - and we see where that has led.
I view the European debt crisis as a preview of what the United States will face in the next 5-10 years if we do not get entitlement spending under control. I am dismissive of the ability of tax increases to close our fiscal gap as we are already so far down the road towards insolvency that tax increases are more likely to lead to the massive unemployment and negative tax growth that Greece and Spain are experiencing today. Just my opinion, but the Europeans have been running a grand experiment along the lines of higher government spending and higher taxes for the past 30 years - and we see where that has led.
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